Euology for Eastman Kodak

[lenelg]

"Really, it has to be asked if there was any way that Kodak could have managed a digital transition."

A way of asking that question is to compare Kodak to Fuji, who did manage the transition. I read such an article recently, hopefully someone with better memory can recall where it was published. It is not as if digital imaging came as a surprise to Kodak, they were pioneers in that field, so they helped throw their own spanner in the works. There is a rich literature in the management of technology field on what happens when a new technology undermines the competence base of the imcumbent market leader - the Kodak story is far more common than Fuji´s..

[mediumcool]

"Really, it has to be asked if there was any way that Kodak could have managed a digital transition."

A way of asking that question is to compare Kodak to Fuji, who did manage the transition. I read such an article recently, hopefully someone with better memory can recall where it was published. It is not as if digital imaging came as a surprise to Kodak, they were pioneers in that field, so they helped throw their own spanner in the works. There is a rich literature in the management of technology field on what happens when a new technology undermines the competence base of the imcumbent market leader - the Kodak story is far more common than Fuji´s..

Crap leadership, as usual. Kodak has had so much talent through its doors over many many years, it’s a bloody shame it has come to this.

But not unexpected.

[Rob C]

I think it could have kept on truckin' with Kodachrome had it kept prices reasonable and processing easier/better. I used various locations to get stuff done, and the quality was quite variable, with the best results from Lausanne.

One of their bad decisions was to split the price in such a manner that you could buy the film without processing cost included and then, of course, you had to buy mailers later on... crazy as hell because outwith a very limited list of places, only Kodak could process the film anyway. Pricing like that was, at best, a sort of insult to the buyer's intelligence. At reasonable prices I'd still have been using it for various bits and pieces of work.

Rob C

[Jonathan Cross]

Such a pity that a great company like Kodak is going under.  Who said, 'Adapt or die'?  As a gross generalisation the digital leaders are those who can combine electronics and optical expertise.  I guess that Kodak did not bite the bullet hard enough to re-invent themselves.  There are, however, many examples in other commercial fields of companies who have re-invented themselves successfully.  I guess that we should not cry over this, but concentrate on shaping the future as we photographers want it, and encourage companies to supply us.

Jonathan

[digitaldog]

Crap leadership, as usual. Kodak has had so much talent through its doors over many many years, it’s a bloody shame it has come to this.

Agreed. And not just digital photography per say, they were producing really state of the art color management solutions long before others. How about PhotoCD (a kind of raw format well before it’s time). Great innovators with amazing technology and just awful management that killed off this innovation. Such a shame.

[markd61]

"Really, it has to be asked if there was any way that Kodak could have managed a digital transition."

A way of asking that question is to compare Kodak to Fuji, who did manage the transition.

Though it seems analogous, Fuji is was and is very different from Kodak. Kodak's position as market leader bred overconfidence and a cash cow entitlement approach to the industry.  Fuji by comparison had an entrepreneurial approach to America as it had no presence until 1965.

Kodak never really had a stomach for upsetting their comfortable environment and creating the fast moving, hungry atmosphere that the new technology demanded. Nor were they interested in giving up 85% gross profit to start businesses that rapidly devolved in commodities.

Fuji also struggled with the digital transition. I have many friends that lost their jobs at Fuji in the last ten years as a result of plunging sales. The recent fashion of their cameras is welcome but does not replace the staggering income that paper and chemistry provided. They were just  luckier and more adaptable.

[Wayne Fox]

Kodak's biggest challenge in the 90's to try to transit from a chemical company to an electronic company.  To move from a low price high volume consumables made by a chemical company (in reality that's what they've always been) to a lower volume very high tech gear model.   Their options weren't great.  Was that even possible?  Probably only through acquisitions - and by the time it became apparent they no longer had the financial strength to do it.  The evolution of the high quality/low price digital camera surprised them (as it did everyone else). Who knows if any other choices would have helped ... sort of like the company that made buggy whips when automobiles came along.

As one who has a lot of good friends in Kodak management and having chatted with a couple of them over the last few months (including a VP) this is all a little premature. It's unfortunate the US term for a bank overseen reorganization is "bankruptcy".  Basically this a process that many big companies have gone through.  Business will continue as usual as they seek to leverage their patent portfolio and jettison some of their unprofitable operations.  I agree that the first thing they should do is also jettison the current top management ... seems if you have been in charge for a while and the result is a chapter 13, you should have the decency to admit you don't know what you are doing and quit, and if not the board should give you the boot.

But I guess eulogy is right to point ... they will never be the company they were.  The technology of photography has moved from chemicals to electronics.  But this isn't news ... this happened over a decade ago. Their eulogy was written then.

[Alan Goldhammer]

Kodak's problem was the divestiture of a number of business units that they did not believe fit in with their core photography business.  The spun off Eastman Chemicals (they were a major manufacturer of carpet fibers about 30 years ago) and a promising diagnostics division both of which had great cash flows that could have buffered the company against the photography downturn when it came.  Eastman Chemicals is doing just fine these days.  They had a promising biotechnology division that developed a novel approach to snowmaking that was used in the Calgary Olympics and started a pharmaceuticals division to capitalize on the superb organic chemistry group within the photography division (my PhD adviser was the first and only VP for research as they pulled the plug on this venture after about 2 years).  They have had a number of other ventures which were never fully capitalized on.  Of course this will all go down as a business case study for aspiring MBA students.  Too bad really.

[marcmccalmont]

My first airline was Pan Am, same story different time. A great american icon down the tubes because upper management was greedy wanting it all for themselves not doing what is best for the company, stockholders and employees. 
Marc

[amsp]

I'm amazed at how often this has to be repeated, Kodak has filed for bankruptcy PROTECTION people, not bankruptcy. They have even secured funding to keep business going as usual through the restructuring. Also, the film division is one of their profitable ones, so there are no plans on shutting down that operation any time soon.

[kwalsh]

The article was a nice reflection, but it overlooked another longer and deeper problem with Kodak.  It fundamentally did not care about its customers beyond them being a short term profit center to be milked as efficiently as possible.  This was before the shift to digital.  Before Fuji showed up on the scene with punchy films.  Recall the complete longevity failure of their color negative films and papers way back when.  They shoved these down their customers throats, especially wedding photographers, and then not only ignored but actively suppressed any reporting on the problem.  Many photographers went out of business over the issues as their customers photos faded incredibly fast.  Negatives weren't recoverable.  Kodak washed its hands of the problem and the photographers were caught in between their vendor's indifference and their customer's rage.  Now we have a whole generation of wedding photos lost, NASA spending millions refrigerating and scanning film, and Hollywood films lost.

Kodak had many great people at it who innovated and added much to the world of photography.  Unfortunately, the corporation itself just never gave a damn.  They should have died decades ago.  Yeah, they are under "reorganization" and not dead.  Really, though, the photographic community would be better off if this corporation had been burned to the ground in the 1970s and the talent picked up or reorganized into organizations that actually gave a crap about their customer base.

Good riddance Kodak - you won't be missed even if a few of your products will be.

Ken

[johnvr]

Yes, Kodak will never be what it once was, but it's not gone. Just restructuring.

My first digicam was a Kodak. The first serious digital camera for photojournalists was a Kodak. They were in the game early on but then for some bizarre reason dropped out and just let it slide.

As far as victims of the digital revolution go, I don't miss my Kodak film much, but I do miss the Contax cameras and underlying philisophy.

[amsp]

Yes, Kodak will never be what it once was, but it's not gone. Just restructuring.

My first digicam was a Kodak. The first serious digital camera for photojournalists was a Kodak. They were in the game early on but then for some bizarre reason dropped out and just let it slide.

As far as victims of the digital revolution go, I don't miss my Kodak film much, but I do miss the Contax cameras and underlying philisophy.

I also don't get why they don't make a high-end affordable film scanner. Even if they didn't make a cent on it they would surely make up for it in increased film sales. I see a real resurgence of film shooters on the net, some people are going back to shooting film alongside digital, and a new generation are discovering film for the first time and loving it. Kodak said in an interview in November that film sales were still strong and they were excited in seeing the segment actually growing for the first time in a while. But everyone seems to be complaining about the same thing, the lack of a good scanner. As it stands now the only hope is the Plustek Opticfilm 120, I'm crossing my fingers for quality AND affordability.

[AFairley]

(OT) Many of my Kodachrome skies were pinkish....

[MarkL]

Kodak had arrogant and litigious management - I will not miss them. They drove film users away with their rapid culling of films and I have not used any product by them for probably 7 years.

[schrodingerscat]

Kodak could arguably be called the father of modern digital photography. While HP and Sony came out with still cameras early on, they were more or less video cameras that captured stills. Apple actually came out with the first consumer digicam in '94 and Kodak came out with their first digicam in '95 that used their own designed and manufactured CCD, which was developed for use in the first DSLR(based on a Nikon film SLR), that came out in '91. During these early days they also started producing sensors for NASA and the DOD in their drive to go filmless. My first digicam was a Kodak purchased in '98.

So it seems their problems were not caused by anything on the technology front, but probably from a questionable corporate culture that continues to haunt the world.

As an aside, my dad worked as an electronics design engineer for a little company in San Diego called Spin Physics in the 80's. They had developed a video system capable of capturing 2,000 frames per second, which required new sensor and capture technology as well as a new method of grinding the recording material for the tape. SP was acquired by Kodak in the mid 80's and came out with a modular video 8 video system soon after. Every time I pick up my M9, I wonder if there's a little of his DNA in the sensor. I still have the 4X5 negs of their first prototype.

[BJL]

Kodak did some great pioneering work in CCD technology and digital photography, but in addition to the management being slow to commercialize it (in a futile attempt to protect film sales?) Kodak failed in its attempts to make the next transition to active pixel CMOS sensors, leaving it only a small niche of high-end and low volume special purpose sensors while Canon, Sony, Panasonic, Nikon etc. took over the other 99% of the camera sensor market.

[barryfitzgerald]

Kodak failed because they didn't try even a little bit at the digital camera market. They bored people to tears with tedious uninteresting cameras that relied only on the name to sell. It didn't have to be this way, it was one of serious mismanagement from the top leadership at the company.

But as it is, I think there are too many makers in digital cameras and some need to go away. This is one of them, there may be a few more to follow. Fuji have come on a lot but still suffer from QC problems that tarnish their image. Samsung has potential but not the expertise to pull it off I predict they will struggle in the market and will likely be the next maker to abandon the market. Pentax are probably too small and need to go too. I'd like to see Sony leave too and get A mount back to a maker who knows how to deliver the goods 
Interesting that film has survived even at Kodak..now that one is a small comfort for those of us who do shoot a bit of the old stuff

[Bob J]

I note that GM are now doing fine having gone Chapter 11 a few years ago, maybe there is a way for Kodak too...

Strange to think that of the big film manufacturers of my youth (Kodak, Agfa, Sakura/Konica & Fuji) only Fuji are reasonably big in Camera imaging now... These guys shoudl have had a head-start on the rest.

@Barry, don't be too hard on Sony, if they hadn't been there A mount would have died with the KM bale-out.

[BJL]

For Kodak in particular, the photographic expertise had come to be mostly in films and emulsions, not the other aspecs of photographic that carry over to digital imaging, like lenses or camera electronics. Fujifilm apparently put more of its transition efforts into exploiting other markets for its chemical expertise; digital photography is not a dominant part of Fujifilm's business these days. For example, Fujifilm still sells lots of film in the literal sense of thin transparent plastic sheets, but not coated with light-sensitive chemicals. Kodak for whatever reason was far less successful in diversifying its chemical products market.

The Economist published an interesting comparison of Kodak and Fujifilm.